M.R. Hariharan Nair, J.@mdashThe petitioner-Church of South India is aggrieved that the Corporation of Thiruvananthapuram has imposed property tax for its buildings situated in the L.M.S. Compound, Thiruvananthapuram for the years 1985-86 and 1986-87. The petitioner challenged the orders of the authorities under the Kerala Municipal Corporations Act before the District Court, Thiruvananthapuram; but as per Ext. P1 order the appeal (Ext. P3) was dismissed. Even though the present Original Petition was filed invoking Art. 226 of the Constitution of India, after the amendment through C.M.P. No. 36962/2001, the Original Petition has to be treated as one under Art. 227.
2. According to the learned counsel for the petitioner, S. 103 of the Kerala Municipal Corporations Act has to be given a wider meaning and if so construed, it can be seen that the petitioner''s building would be entitled to exemption by virtue of S. 103(1)(d) of the Kerala Municipal Corporation Act. It will be useful to quote S. 103(1)(d) of the Act including proviso and explanation thereunder here.
"103. Exemptions.-
(1) The following buildings and lands shall be exempt from the property tax:-
(a) xxx xxx xxx (b) xxx xxx xxx (c) xxx xxx xxx
(d) lands and buildings or portions of lands and buildings exclusively occupied and used for public worship or by a society or body for a charitable purpose:
Provided that such society or body is supported wholly or in part by voluntary contributions and applies its profits, if any, or other income in promoting its objects and does not pay any dividend or bonus to its members.
Explanation-"Charitable purpose" includes relief of the poor, education and medical relief but does not include a purpose which relates exclusively to religious teaching;"
3. According to the petitioner, in order to attract the exemption under the aforesaid clause it is not necessary that the building should be exclusively occupied by the owner body itself. It can also be used by others based on lease and the predominant question is only whether the income generated from the building is diverted for charitable purposes. It is pointed out that there was no effort made by the authorities under the Municipal Corporation Act to examine whether income from the building is so diverted and as such the impugned orders are untenable.
4. The learned counsel for the Corporation submitted that the provision is to be strictly interpreted and the unless the petitioner''s case comes within the four corners of the exemption provision, the benefit cannot be extended.
5. Under S. 136 of the aforesaid Act there is provision for exempting any person or class of persons from payment of such tax. It was mentioned during hearing that the motion may by the petitioner in that regard did not succeed and that the consideration necessary is only with regard to the eligibility for exemption for the buildings in question under s. 103 of the Act.
6. It can be seen from a perusal of S. 103(1)(d) of the Act aforementioned that for claiming exemption the following ingredients have to be satisfied:
1) That the building or portion of building is exclusively occupied and used for public worship or
2) That the buildings are exclusively used by a society or body for a charitable purpose.
7. In that instant case, there is no case for the petitioner that the buildings are occupied by the petitioner itself. The only other question is whether it is used by the society for a charitable purpose. ''Charitable purpose'' by virtue of the explanation includes relief of the poor, education and medical relief. The petitioner''s case is that it is maintaining (a) Polio Home at Trivandrum with 144 handicapped children therein, (b) Blind school at Varkala with 55 blind children therein, (c) Deaf school at Valakom with 164 deaf children, (d) 20 poor homes housing 1115 orphans, (e) 9 hospitals in different parts of Trivandrum and Kollam and (f) a College and 6 High School, 5 Upper Primary School and 55 Lower Primary School catering to the educational needs of children irrespective of their caste, creed and religion. It was for the petitioner, if at all it is entitled to the benefit of exemption, to place before the appropriate authorities the evidence to show that the income that is generated by letting out the building is diverted for incurring the expenses for running the aforesaid institutions. The petitioner has no case that such evidence had been placed before the Corporation or before the Appellate or Revisional Authorities. It is not possible therefore to believe the case of the petitioner that the income from the building or atleast substantial part thereof is spent for the purpose of running the aforesaid institutions.
8. Similar question as to whether the two auditoriums belonging to a Temple trust is entitled to the benefit of exemption from profession tax and property tax under the similar provision in subsequent enactment, namely, the Kerala Municipalities Act, 1994 came up for consideration of a Bench of this Court in Writ Appeal No. 2454/2000 (Attukal Bhagavathy Temple Trust v. Corporation of Thiruvananthapuram (2001 (1) KLT 108) The question considered was whether the said auditoriums could be considered as Choultries for the occupation of which no rent is charged. It was found that it is not all charitable purposes which are exempted under the said provision. The charitable use of premises as choultry or as a place used for sheltering the destitutes or animals alone are liable for exemption and that the building of the appellant used as auditoriums do not qualify for exemption from profession tax or property tax, albeit the petitioner is a charitable trust.
9. Aliya Arabic College v. Kasaragod Municipality (1988 (2) KLT 11) arising from the erstwhile Municipalities Act, 1960 dealt with the question whether exemption from payment of property tax could be allowed to a charitable institution''s, shopping complex-cum-lodging house, if that is let out on rent. There also the exemption was claimed under S. 101(1)(c) which exempted choultries for the occupation of which no rent was charged. It was found that even assuming that the rent obtained from the building is used exclusively for charitable purpose, it would not be sufficient for the eligibility of exemption under S. 101(1)(c) of the Act.
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11. During hearing, the learned counsel for the petitioner relied on the decision in State of Kerala v. St. Gregorious Medical Mission (1992 (1) KLT 230) The question considered there was whether exemption from building tax under the Building Tax Act, 1975 could be allowed. It was found that if the main purpose for which the building was used was for running a hospital for the relief of the sick and to achieve that laudable aim some income is also generated from the patients admitted in the hospital, so long as it is not for the purpose of earning any profit, the principal object, namely, charitable purpose, would continue to be valid. Merely because some amount was collected from patients that will not be sufficient to hold that it is not intended for relief of the sick.
12. St. James Hospital v. Chalakudy Municipality (1998 (2) KLT SN 26 - Case No. 30) is a case where exemption under s. 101(1)(d) of the Municipalities Act 1960 was claimed. The owner of the building was a trust. Following the decisions in Nedumchalil Charitable Trust v. Municipal Commissioner (1991 (2) KLT 180) and State of Kerala v. St. Gregorious Medical Mission (1992 (1) KLT 230) it was held that the fact that some fee is charged from the students is not decisive and that what has to be looked into is whether the expenditure incurred in running a society is supported either wholly or in part by voluntary contributions. However, the court noted that there was no material furnished by the petitioner to come to the conclusion that the institution was providing medical relief to the poorer. However, from the statement of income and expenditure produced before court in that case, it could be seen that the total income from the Pharmacy collection, I.P. collection, lab collection, consultation fee, income from operation, X-ray collection, advertisement charges, income from minor surgery, E.C.G. Collections, agricultural income, interest etc. came to nearly at Rs. 16 lakhs and that only a sum of Rs. 78,876.51 could be taken as amount spent for medical relief to the poorer. It was therefore found that the activities of the hospital was mainly commercial in nature and that the petitioner, in the circumstances, was disentitled to get the benefit of exemption contemplated in S. 101 of the Kerala Municipalities Act.
13. The petitioner, it is stated, has been paying tax assessed by the Corporation for all previous years. The challenge regarding liability to pay tax is made for the first time in the present Original Petition. As already mentioned, the petitioner has not produced before Court the relevant data which would show that the income received from the buildings in question is diverted exclusively for charitable purposes as mentioned in the explanation under S. 103(1)(d) of the Kerala Municipal Corporation Act (Act 30 of 1961). In view of this position, the petitioner, as rightly held by the learned District Judge, is disentitled to the benefit of tax relief.
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15. The Original Petition, in the circumstances, is found to be without merit and it is dismissed.
